When the article discusses selling cars-at a loss

Reference no: EM13902595

A recent issue of Business Week reported the following:

During the recent auto sales slump, GM, Ford, and Chrysler decided it was cheaper to sell cars to rental companies at a loss than to lay off work- ers. That's because closing and reopening plants is expensive, partly because the auto makers' current union contracts obligate them to pay many work- ers even if they're not working.

When the article discusses selling cars "at a loss," is it referring to accounting profit or economic profit? How will the two differ in this case? Explain briefly.

Reference no: EM13902595

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